Scottish Trust Deed Question

tigerfeet2006

Stupid move. You will have lots of questions about the fact you secured a debt and then went to a trust deed and could probably cause yourself problems.

Have you actually checked what the equity in your house is recently?

WorkInProgress

The flat below me sold for £60K recently, I owe approx £44K on mortgage and £12K on unsecured (both to NR). There is about £18K other unsecured debt. My thinking was that on either Trust Deed or DAS/DMP I will have to include the £12K unsecured to NR with the other unsecured debt. It would be advantageous to have the £12K secured.

tigerfeet2006

I have a feeling they could refuse to put you on a trust deed if you did that.

Give some one like National Debtline a ring and discuss this with them. Click on the link in my sig. and follow link to Scotland.

coolcait

WorkInProgress wrote: »

Well I had my interview with the money advisor this morning and not really much further forward. She spoke about a "Pro Rata" which I think is just a DMP which they'll administer. From what I gather I won't have any protection and interest will only be frozen IF the creditors agree.
Dunno what to do now...

Hiya again (and sorry for bumping up the old thread - I've had a poorly PC for a couple of weeks, and am just catching up!).

If your money adviser is suggesting pro rata payments, in the form of a DMP with no protection from creditors or freezing of interest, then I'm astunded that she hasn't suggested the Debt Arrangement Scheme! It works the same lines as a DMP but it also provides protection from creditors and mandatory freezing of interest, fees and charges while you keep up the payments. Once you complete the payment programme, the interest etc is written off. You can find out more about it here:

www.moneyscotland.gov.uk

You need to go to a DAS approved money adviser if you want to get onto the scheme. You can check here to see if your adviser is a DAS adviser. If she isn't, ask her if she can put you in touch with someone who is.
http://www.moneyscotland.gov.uk/das/das_display.jsp?pContentID=247&p_applic=CCC&p_service=Content.show&

HTH

WorkInProgress

Hi Coolcait,

I did ask her about a DAS but she seemed to think it would take weeks to get a DAS setup and thought the Pro Rata would be the better option. I, like you, don't think a Pro Rata offers me enough protection and don't think I'll go this route.

What's your thoughts on the unsecured part of my NR Together mortgage. I had thought that NR would be happy to do this if I spoke to them and explained what was happening. Would it raise issues if I went into a Trust Deed?

coolcait

WorkInProgress wrote: »

Hi Coolcait,

I did ask her about a DAS but she seemed to think it would take weeks to get a DAS setup and thought the Pro Rata would be the better option. I, like you, don't think a Pro Rata offers me enough protection and don't think I'll go this route.

What's your thoughts on the unsecured part of my NR Together mortgage. I had thought that NR would be happy to do this if I spoke to them and explained what was happening. Would it raise issues if I went into a Trust Deed?

Hiya WIP

I have absolutely no idea about any legal pros or cons over turning the unsecured part of your 'Together' loan into a secured debt. My personal instinct is against turning any unsecured debt into a secured debt. But that is purely my instinct. I'm also inclined to agree with others who have suggested that it might cause you problems if you secure this debt and then move to a Trust Deed. Again, these are just personal views, and I can't say one way or another whether it would definitely raise issues for you. I'll echo the advice about contacting National Debtline or a similar organisation on this point.

Could you ask your money adviser to break down the timescale she's given you for setting up a DAS? Is it because the DAS advisers are swamped? Or is she thinking that creditors get given three weeks to agree or disagree?

If it's to do with the latter point, then bear in mind that a Trust Deed won't give you any protection until it gets 'protected'. This means that - after you've consulted a trustee and decided that it really is the best option for you, and then sign the Trust Deed - your trustee has to advertise it in the Edinburgh Gazette, which is published twice weekly. Creditors have five weeks from the date it's advertised to object. If none of them (or not enough of them) object, then your trustee gathers up the paperwork and sends it to the Accountant in Bankruptcy to have it registered on the Register of Insolvencies. At that point it becomes protected. Best case scenario is probably 6 weeks from you signing it till it becoming 'protected'.

For a DAS, your money adviser would check the details of what you owe to each creditor and send them an official form with the payment you're offering each month. The creditors have 21 days to reply to that. If they all agree (and not replying counts as agreement), then the money adviser sends the forms to AiB, and it gets approved automatically. Even if some of the creditors don't approve, your creditors can't take legal action while the AiB are deciding whether to accept it or not.

If, for some reason, you're threatened with legal action while the money adviser's sorting things out, you can formally advise the AiB that you're thinking of a DAS (it's called an 'intimation'), and that will give you six weeks protection from legal action by creditors. All in all (and all of my personal prejudices aside ) I don't really follow your MA's logic that setting up a DAS takes that much more time than a trust deed or a pro rata scheme . Especially when you consider the advantages that a DAS has for you, the client, over a pro rata scheme!

Remember too that a trust deed is a form of personal insolvency. A DAS is not.

HTH - and good luck with whatever you decide.